What Is Public Enterprise?

Public enterprise is an economic system in which the central government makes all the major economic decisions for the country. Aka communism, centrally planned.

Advantages include:
-planning encourages high rates of economic growth
-planning helps reduce wastage of resources
-the distribution of income is more equal
-essential goods are produced before less essential goods
-planned economies do not suffer from unemployment and inflation related to the business cycle

Disadvantages include:
-planned economies are bureaucratic and inflexible
-there is little incentive for efficient management
-the system stifles individual effort
-freedom of choice is restricted
-the quality, quantity and variety of goods are limited

A public enterprise, also called as public limited company, which is wholly or partially owned by the public. The advantages of Public enterprise are:
- Limited or no personal liability
- Capital inflow from public
- Funds from government and public sector are easily injected.

Disadvantages are:
- Voting for the top management is done by public.
- conflicts over voting rights and ownership issues.
- even if it incurrs a loss, it has to pay dividends to the share holders.

This is related to government sector and he is only who one who take the decision in all the aspect.

Basically a public enterprise is the one which is controlled by government. However, there are many states which do not agree with this simple definition of public enterprise. Therefore, more precisely, a public enterprise is the company which is either completely or partly owned by the state or in other case it is controlled by a public authority. Sometimes public enterprises are operated as public ownerships. Some examples of the public enterprises include Utility companies like gas, electricity, etc. The basic objective of a public enterprise is the public interest. The expenditures of the public enterprises are carried out by the regular operations of the company and the capital is provided by the treasury.

Public enterprises

They are formed by the government with government fund except when the government enters into partnership with a private entreprenuer.